JIGJIGA UNIVERSITY

COLLEGE OF BUSINESS ECONOMICS

DEPARTMENT OF MANAGEMENT
MBA PROGRAM
Course: Cost & Managerial accounting
Individual assignment on Article review
Implementation of Managerial Accounting Methods: Article review
on production Firms in Jigjiga.

By: Keyd Muhumed Mahamed - ID No: GSW/0213/14

Submitted To: Dr. Kaldir Hassan

Date: January 2022

SUMMARY OF THE ARTICLE

PURPOSE OF THE ARTICLE/PROBLEM STATMENT
What are the implementation and practice of managerial accounting method in the
operation of Jigjiga production firms for the last three years?
What factors affect the implementation and the perceived effect of implementing
managerial accounting method on those firms’ operating efficiency and financial
performance?

OBJECTIVES OF THE STUDY

To assess the implementation of managerial accounting method in selected production
firms in Jigjiga, To investigate the factors affecting the implementation of this technique
in selected production firms in the study area. To evaluate the perceived effect of
adopting managerial accounting method on those firms’ operating efficiency and
financial performance

DATA USED
Both primary and secondary data are used in the study. Primary sources of data include
questionnaires, whereas secondary sources data was generated through a review of
relevant documents.
The questionnaire is used to collect primary data and being the dominant tool for
collecting first-hand data is developed to collect required data from selected
respondents, a survey study instrument.

METHOD OF DATA ANALYSIS

The relevant data are processed and analyzed after collection using a statistical software
package called Statistical Package for Social Sciences (SPSS) and coding was used that
allows the researcher to present the information in the form of tables and figures.
The data from the questionnaire is sorted out and at the same time, the information is
checked for completeness. Then the responses to the questionnaires are examined to
derive a relationship between the variables of the financial information about the
implementation of managerial accounting and the operational efficiency and financial
performance of the firms. Descriptive data analysis is chosen for its simplicity and clarity
of presentation in drawing conclusions. Average and percentage calculations are used
for analysis purposes when required.
RESULTS, CONCLUSIONS AND POLICY RECOMMENDATIONS
Andreas, (2013), Garrison et al., (2010), & Weygandt et al., (2008) introduced the use of
environmental and target costing, just-in-time manufacturing, kaizen costing, and a
benchmarking scheme for minimizing the cost of producing and storing a product over a
long period of time.
Likewise, her books highlight and draw attention to the use of budgets for planning and
coordination functions, determining the level of capacity-related and flexible resources,
directing the budgeting process, interpreting the production plan, comparing actual and
planned results, and preparing periodic and continuous budgeting.
Controlling discretionary spending and the role of budgeting in service and non-profit
organizations. The researcher-analyzed data for the purpose managerial accounting
method according to responses from 35 usable questionnaires collected from
manufacturing firms in Jigjiga to compare the on-site reality with the theoretical
perception.
Respondent companies were asked to state the purpose for which their firms use the
above managerial accounting method, and their responses were analyzed using
descriptive statistics. The result was summarized in the frequency table developed with
SPSS V-20.

CONTRIBUTION OF WORK TO OUR COURSE

The management of the organization is responsible for making various decisions after
providing relevant information from responsible bodies, supported by applied managerial
accounting method. For this reason, companies operating in developing countries like
Ethiopia are also responsible for adopting and implementing cost and management
accounting tools originally adopted by developed countries to make effective and
meaningful decisions. Therefore, the article contributes to a practical result for the
assumption managerial accounting about the efficiency and financial performance of
firms.

STRENGTHS AND WEAKNESSES OF THE PAPER

As Weakness
The scope of this study was limited to investigating the degree of implementation of
managerial accounting method and assessing factors affecting the implementation of
those tools based on a sample of 35 usable responses from manufacturing firms in
Jigjiga. Therefore, the result cannot be generalized to all manufacturing firms in jigjiga.
Furthermore, there are numerous managerial accounting tools practiced by
manufacturing firms over the world, but for this study, only a few of them were
investigated. Additionally, the method of data collection in this study was only a
structured questionnaire hence data validity, might be below. There are only a few
factors affecting the implementation of managerial accounting method are included in
the model

As a strength
It was clearly noted that the summary and introduction generalize and emphasize the
purpose and aim of the article.
The conclusion of the article is based on the research question. The article used various
and appropriate pieces of literature as a basis for its further study. The reference used in
the work is clearly listed.